Legislators aim for fast-track cuts in special session

CARSON CITY — Some lawmakers are suggesting cuts of $100 million or more could be implemented quickly by bipartisan agreement in the upcoming special session, leaving other decisions on Nevada’s massive budget shortfall for another day.

Legislative leaders of both parties met again Tuesday by telephone, trying to refine what could be accomplished quickly at a three-day special session scheduled to start Friday.

Assemblywoman Sheila Leslie, D-Reno, said any budget cuts will be targeted to specific areas and programs but will encompass nearly all agencies and the higher education and public education systems.

“Any cuts we make this time around will be painful,” she said. “The pain will be shared across the board. But we’re trying to minimize the damage.”

Cash flow concerns between now and when the Legislature meets for its regular session in February can be addressed by approval at the special session of using the state’s rainy day fund. Lawmakers already have agreed to deplete the $267 million fund, but it requires action by lawmakers.

With the rainy day fund freed up for use and another round of cuts made, lawmakers could adjourn and use the Interim Finance Committee to approve further reductions with Gov. Jim Gibbons when and if they are needed, Leslie said.

The interim panel is made up of the budget committees of both houses and can approve budget reductions without bringing the full Legislature into session.

“Once we have a road map to get to a balanced budget, we will know what has to be done in a special session,” she said.

But Senate Majority Leader Bill Raggio, R-Reno, disagreed that half measures are all that are needed in the special session.

“You can’t jump half way across a river,” he said. “We have to do it now. We can’t hope and pray that something is going to happen between now and February when every economic indicator indicates just the opposite.”

Gibbons, speaking on the “Nevada NewsMakers” TV program Tuesday, said he will present his 21-point plan to solving the budget crisis Thursday, when he gives a televised address.

Gibbons and lawmakers are looking at cuts of as much as $250 million, beyond the $913 million in cuts already made to the current two-year budget. The second year of the budget starts Tuesday.

Some of the proposals being considered either by Gibbons or lawmakers include the following:

•Closing the Nevada State Prison as suggested last week by Corrections Department Director Howard Skolnik. Closing the prison would eliminate 200 jobs and save an estimated $19 million a year. The 900 inmates would be housed in other facilities. Skolnik said an expansion of “good-time” credits for nonviolent inmates, making them eligible for parole more quickly, might help make the closure possible. But lawmakers want to ensure that inmate population projections confirm the closure is possible.

•Taking some or all of the $96 million set aside for textbook purchases for the public schools for next year. Taking all of the money would mean no new textbooks, but a lesser amount could be directed to the shortfall. A 50 percent cut would generate $48 million.

•Revenue enhancements. A tax amnesty plan that will start Tuesday could generate millions of dollars for the general fund. What the amount could be is being analyzed.

Leslie said reluctance exists to cut the 4 percent cost-of-living raises for teachers and state employees set to take effect Tuesday because of legal ramifications and because providing the raise “is the right thing to do.” Eliminating the raises would save $130 million.

But there are cuts that can be made if an agreement is reached between Republicans and Democrats, she said.

Leslie offered no specifics and said leadership was meeting to come up with a list of cuts that could be approved quickly by the Legislature.

“We haven’t landed yet,” she said.

Some lawmakers remain skeptical of the $250 million in cuts called for by the projections of the Economic Forum on Friday.

One possible solution, Leslie said, would be for the Legislature to use “trigger” mechanisms to deal with the shortfall. Under such a plan, if revenues come in better than projected over the next several months, some program cuts might not have to be carried out.

Lawmakers are not obligated to use the Economic Forum projections, but Leslie said lawmakers want to ensure their actions will eliminate any shortfall and balance the budget as required by law.

But questions remain because the Legislature’s analysts, who produced their own projections for lawmakers of both parties, came in with a shortfall figure of under $100 million, Leslie said.

Contact Review-Journal Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775- 687-3900.